Supercomnet Technologies Bhd (+ve)

SCOMNET (Fundamental: 2.35/3, Valuation: 1.2/3) saw a sharp spike in volume yesterday with over 10 million shares traded. Its share price closed 12.5% higher at 13.5 sen. 

The company manufactures advanced high technology cables for the IT sector. Revenue dropped  24.1% from RM34.64 million to RM26.28 million in 2013, while net profit decreased 55.9% from RM1.47 million to RM0.65 million. This was attributed to stiff competition and challenging business environment.

Positively, revenue rebounded in 9MFY14, rising 28.9% over the previous corresponding period to RM25.96 million. Net profit improved sharply, from RM0.19 million to RM1.15 million — on the back of higher sales volume. The bulk of earnings come from its associate, Supercomal Medical Products, which manufactures cables for medical devices.

The stock trades at a trailing 12-month P/E of 18 times and 0.76 times book. No dividend was paid in 2012-2013. It has net cash of RM8.1 million.

This article first appeared in The Edge Financial Daily, on February 25, 2015.